Economy

Stock Market Breaks Winning Streak After Data Reveals ‘Worrying Deterioration’ In Economy – Forbes

Published

2 years ago

July 22, 2022

Topline

The stock market fell Friday after new data showing U.S. manufacturing activity has stalled and the service sector’s pandemic recovery has gone into reverse as a result of high inflation and mounting interest rate hikes, feeding concerns that the Federal Reserve’s efforts to cool decades-high price increases may force the economy into a recession.

Key Facts

The Dow Jones Industrial Average fell 138 points, or 0.4%, to close at 31,899, while the S&P 500 fell 0.9% and the tech-heavy Nasdaq 1.9%; for the week, the indexes ended up 2%, 2.5% and 3%, respectively.

Though roughly flat to start the day, stocks started sinking after S&P Global reported business activity has fallen “notably” in July, with its widely monitored Flash U.S. PMI Index posting the sharpest decline in output since May 2020 amid the pandemic recession, despite expectations for a slight gain.

In a statement, S&P Global chief business economist Chris Williamson said the unexpected contraction points to a “worrying deterioration” in the economy as inflation, higher interest rates and “growing gloom” about the economic outlook overcome the pent-up demand that helped fuel growth during the pandemic.

With companies’ expectations of future growth slumping to the lowest level since the early days of the pandemic, firms are starting to reassess their production and workforce needs, resulting in slower employment growth, Williamson adds.

S&P Global wasn’t alone in raising new concerns on Friday: Bank of America economist Michael Gapen wrote in a note to clients that gross domestic product likely shrank 1.5% last quarter as a result of a steeper-than-expected housing market decline and a sharp increase in business inventories (as consumer spending slows).

Gapen said the slew of economic data pushing sentiment down this week supports the bank’s projection that the U.S. will fall into a recession later this year, with inflation—which last month clocked in at 9.1%—likely taking at least another two years before falling in line with the Fed’s mandate of 2%.

Surprising Fact

When excluding the pandemic lockdown months, S&P Global’s survey data, collected from around 800 companies, showed output falling at a rate not seen since the global financial crisis in 2009.

Key Background

Major stock indexes plunged into bear market territory last month ahead of the Fed’s latest policy decision, and growing fears of an impending recession have since ushered in waves of layoffs among recently booming companies. To make matters worse, the U.S. economy unexpectedly shrank 1.6% in the first quarter, its worst performance since the Covid recession. Meanwhile, a growing number of economists, including those at Bank of America, now forecast the economy shrank again in the second quarter, which would constitute a technical recession.

What To Watch For

The latest relief rally in stocks will surely be tested further next week. The Fed is expected to raise interest rates by 75 basis points for the second month in a row Wednesday, and the Bureau of Economic Analysis releases its estimate for second-quarter GDP growth on Thursday. Meanwhile, a slew of tech earnings start Tuesday, with Google and Microsoft slated to report in the afternoon.

S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

Published

18 hours ago

September 13, 2024

Anne Joseph

TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Statistics Canada reports wholesale sales higher in July

Published

1 day ago

September 13, 2024

Anne Joseph

OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.

The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.

The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.

The personal and household goods subsector fell 2.5 per cent to $12.1 billion.

In volume terms, overall wholesale sales rose 0.5 per cent in July.

Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.

This report by The Canadian Press was first published Sept. 13, 2024.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets mixed

Published

2 days ago

September 12, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 172.18 points at 23,383.35.

In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.

The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.

The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.

The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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